Ether Plunges to Lowest Level in 8 Months
Ether (ETH) price recently hit its lowest level in eight months. This noticeable decline raises concerns about a recovery that could take longer than expected.
Catalysts Behind Ether’s Decline
On August 5th, Ether’s price fell to $2,100, marking a 22% drop – the altcoin’s largest one-day decline since May 2021. Several factors are behind this rapid decline:
- Strategic Moves: A significant transfer of $315 million worth of ETH by Jump Trading to exchanges indicated a potential liquidation of their positions.
- Macroeconomic Factors: Escalating geopolitical tensions and concerns about a global recession led to massive corrections across financial markets, further pressuring Ether.
Crypto Asset Recovery: A Rocky Path
ETH’s downfall has affected Ethereum investment products, leading to significant capital outflows. According to a CoinShares report dated August 5th, crypto investment funds saw their first net outflows after four weeks of inflows, with investors withdrawing over $528 million during the week of August 3rd.
Decline in On-Chain Activity
Ethereum’s on-chain activity also shows a decline:
- The number of active and new addresses on the blockchain dropped from 93,840 to 82,540 between July 27th and August 3rd.
- Daily transactions on the network decreased from 1.17 million on July 6th to 1.11 million on August 4th.
This decline comes after the recent launch of Ethereum spot ETFs in the United States, suggesting that some investors prefer exposure to Ether through funds rather than directly purchasing the crypto asset.
Current Outlook
Currently, ETH is striving to break the $2,500 mark. However, the outlook for a swift price recovery remains uncertain. Some analysts foresee the asset falling to $2,000. In short, the road to recovery could be long and uncertain.
